Do governing institutions affect foreign direct investment inflows? New evidence from emerging economies

Institutions and Investment in the South and East Asia and Pacific Region: Evidence from Meta-Analysis

“…Empirical studies on the measures of governance and inward FDI for the South and East Asia and Pacific region that have been identified in the search are: Gastanaga et al (1998), Globerman and Shapiro (2002a), Globerman and Shapiro (2002b), Hsiao and Shen (2003), Anghel (2004), Globerman and Shapiro (2004), Gani (2007), Hur et al (2007), Adeoye (2009), Brunetti andWeder (1998), Wernick et al (2009), Ali et al (2010, He et al (2011), Muhammad et al (2011), Jadhav (2012, Luca and Spatafora (2012), Habib and Zurawicki (2001), Wei (2000), Teksoz (2004), Voyer and Beamish (2004), Straub (2005), Dahlstrom and Johnson (2007), Khamfula (2007), Brouthers et al(2008), Cole et al(2009), Sadig (2009), Woo and Heo (2009),Qian et al(2012 and Mathur and Singh (2013), Nigh and Schollhammer (1987), Singh and Jun (1995), Busse and Hefeker (2005), Baek andQian (2011), Zheng (2011) and Driffield et al (2012), Seyoum (1996), Lee and Mansfield (1996), Ahn et al(1998), Li and Resnick (2003), Nunnenkamp and Spatz (2004), Ahlquist (2008),...…”

“…All these studies are grouped based on the measure of governance namely, voice and accountability, political stability, government effectiveness, regulation, law, corruption and aggregate governance. Voice and accountability capture the extent to which citizens in a country have freedom of expression, freedom of association and media and have a voice in the government (Wernick and Haar, 2009). Voice and accountability can affect FDI by inclusion or exclusion of public opinion on investments which can in turn allow or deter foreign investments (Gani, 2007).…”

Aid and Governance: Negative Returns?

“…These criticisms have been directly responded to by Kaufmann et al (2010: 1), the researchers behind the indicators, who note that despite problems associated with this (and all) aggregate data, the indicators 'permit meaningful cross-country and over-time comparisons'. The indicators have been used in this manner in several working papers and recently-published pieces, including Wernick et al(2009), Winters (2010 and Caceres and Kochanova (2012). However, the critiques prompt me to prefer the cross-section 'shift' specification when compared to the TSCS 'level' approach detailed below.…”

Foreign Direct Investment, Institutional Quality, Economic Freedom and Entrepreneurship in Emerging Markets

“…The WGI have been used for several years in some groundbreaking studies (Wernick et al;Dollar and Kraay, 2002;Asterly and Levine, 2003;Faccio, 2006;Gupta et al, 2002, Demirguc-Kunt et al, 2004Pande and Udri., 2006). The WGI also reflect the importance of good governance and a sound political system consolidating economic growth as set forth in the New Institutionalism Theory (North, 1990, Hayek, 1960Williamson, 2000) and The New Theory of Economic Growth (Knack and Keefer, 1995;Olson, 2000;Knack, 2003;Azfar and Cadwell, 2003).…”